Mca Smells A Rat In Disney's Plans For Studio Tour

May 15, 1985|By Vicki Vaughan of The Sentinel Staff

Top officials of MCA Inc., claiming their idea to build a movie studio and tour in Central Florida has been usurped by Walt Disney Productions, warned Tuesday that if the state doesn't back MCA's project, they may abandon it and leave Orlando to become a Disney ''company town.''

MCA president Sidney J. Sheinberg and Jay S. Stein, president of MCA's recreation division, were critical of Disney during an interview Tuesday, charging that Disney is trying to keep out competition in Central Florida, one of the nation's top tourist destinations.

''Disney's ability to decimate you by acting in a predatory way is chilling,'' Sheinberg said. ''Do you really want a little mouse to become one large, ravenous rat?''

Sheinberg said MCA's project, announced in 1980, may be abandoned if the board that controls Florida's state pension fund decides against investing in the attraction.

Sheinberg said MCA wants to go forward with its plans because it has invested $40 million and countless hours in its proposed Universal City- Florida, which would be built on 423 acres southwest of Orlando and fewer than 10 miles from Disney World. MCA, which has interests in film, television and publishing, operates the Universal Studios Tour at its movie lots in Southern California.

Disney owns 27,000 acres at the Magic Kingdom and Epcot Center, the No. 1 tourist attraction in Florida. Disney is the largest employer in the Orlando area.

Sheinberg and Stein said Disney is trying to discourage Gov. Bob Graham from investing state pension money in MCA's projects while borrowing MCA's idea to build sound stages that could be used for making movies while serving as a tourist attraction.

Ash Williams, Graham's deputy chief of staff, said the governor has not met with Disney representatives and has ''no specific plan'' to do so.

Sheinberg said MCA showed Disney chairman Michael Eisner its plans for a studio tour near Disney World when he was president of Paramount Pictures Corp. MCA then hoped that Paramount would become a partner in the venture.

Disney spokesman Erwin Okun said Tuesday that Disney for years has considered a studio tour at Disney World. He said the need for expanded motion-picture sound stages became apparent only after Einser and president Frank Wells joined Disney last fall and vowed to increase movie production from three to as many as 15 pictures a year.

Sheinberg said MCA is reviewing its records and files to determine ''to what degree this is an effort to undermine us.'' Sheinberg at first stopped short of saying that MCA would sue Disney. But later, when asked if an entertainment company has ever filed antitrust action against another entertainment company, Sheinberg said, ''We could be the first.''

Sheinberg said MCA, in seeking the pension funds, promised Graham that the company would increase its investment in the studio tour from $203 million to $300 million, and would build six sound stages instead of four as proposed at first.

Sheinberg said the company will know ''in a matter of weeks'' whether the state intends to invest in MCA's studio tour. If construction starts soon, MCA's Universal City-Florida could open in 2 1/2 years, he said.

Time is critical, Sheinberg said. He acknowledged that Disney's plan to start construction on a similar studio tour within a year could endanger MCA's attraction.

Analyst Harold Vogel, who follows the entertainment industry for Merrill Lynch, said Tuesday he doubts two studio tour attractions could survive in Central Florida. Sheinberg said MCA has not analyzed how a Disney-built studio tour would affect Universal City-Florida.

Sheinberg and Stein, during a meeting Tuesday with The Orlando Sentinel's editorial board, explained the investment offer made to Florida's pension fund.

Simply put, the proposal has two parts:

First, MCA is asking Florida for a loan of $150 million. In return, the pension fund would hold the first mortgage on MCA's 423-acre Universal City- Florida site and all improvements made to it.

Second, MCA wants $35 million a year for five years from the pension fund to be used solely for making movies. If, during a single year, the $35 million investment didn't earn the fund a return on its investment, the company would refund the $35 million after seven year's time. The state would make 40 percent interest on its movie investment after certain costs are deducted.

Had the state invested $35 million in MCA's movies during each of the the last 10 years, it would have made a 38 percent return on investment, Stein said. MCA produced E.T.: The Extra-Terestrial, the top-grossing movie in film history. However, its movies produced disappointing financial results in 1984.